Post-Standard Op-Ed: A Plan for City's Budget Crisis

The most promising approach for immediate relief in the coming year is a restoration of the original plan to pay for state mandates: state revenue sharing.

We should also demand from the state more home rule on taxes, including the right to a local income tax. A city income tax instead of higher property taxes is fairer in Syracuse because the majority of property is owned by tax-exempt government and non-profit institutions.

Originally published on April 08 in the Syracuse Post Standard: http://blog.syracuse.com/opinion/2012/04/a_plan_for_citys_budget_crisis.html

To the Editor:

Syracuse faces a $48 million deficit for the 2012-13 fiscal year beginning July 1. Sixteen million dollars is needed to balance the city budget and $32 million for the school budget.

The school district's reserves are exhausted. Taking $16 million from the city's reserves will draw them down to about $10 million, the minimum level the state comptroller recommends before the state can impose a fiscal stability authority with veto power over our elected city government.

Just 15 months from now, when Syracuse enters its 2013-14 budget year in July 2013, it is likely a fiscal stability authority will be running Syracuse — unless major new revenue sources are secured.

The most promising approach for immediate relief in the coming year is a restoration of the original plan to pay for state mandates: state revenue sharing. If the state restored its traditional commitment to sharing 8 percent of its revenues, the city would receive more than $280 million in state aid instead of the $72 million it will get next year.

A fair state school funding formula that meets the New York constitutional mandate to provide every child a ''sound basic education'' as reinforced by the courts in the Campaign for Fiscal Equity case is another revenue-sharing reform that would relieve fiscally distressed school districts like Syracuse.

Can the state afford to share 8 percent of its revenues? If it restored the progressive taxation it used to have in the 1970s, the state could easily quadruple the $715 million in revenue-sharing in this year's state budget with many billions to spare.

If we go back to the more progressive 1972 tax structure, 95 percent of New Yorkers would get a tax cut and the state would receive $8 billion more in revenue. We would have 14 tax brackets, from a low of 2 percent to a high of 15 percent, instead of the current eight brackets, with a low of 4 percent and a high of 8.82 percent.

If we stopped rebating New York's stock transfer tax, a tiny sales tax enacted in 1905 but 100 percent rebated since 1981, the state would have about $15 billion more in annual revenues.

The rich can afford to pay the taxes they used to. The richest 1 percent of households in New York state more than tripled their share of all income statewide from 10 percent in 1980 to 35 percent in 2007.

We should also demand from the state more home rule on taxes, including the right to a local income tax. A city income tax instead of higher property taxes is fairer in Syracuse because the majority of property is owned by tax-exempt government and non-profit institutions. But a $3.7 billion annual payroll is located here. About 97,000 jobs, about 46,000 of them held by commuters who tend to have the higher paying jobs, provide an average income of $38,000 a year. An average tax rate of 0.5 percent would yield $17.1 million.

If we can win more progressive state and local taxes and revenue-sharing for the 2013-2014 state and local budgets, we can fund reasonable city and school budgets without succumbing to a state-selected fiscal stability authority that will impose severe austerity measures on our schools, services, average taxpayers, and city and school employees.

It is time for our local and state elected officials to join together to fight to save our city and schools with some combination of these reforms. Or do they really want deep cuts to our schools, services, and public employees imposed by a fiscal stability authority so they can pass the blame on to it? The ball is in their court. The clock is ticking.

Howie Hawkins, of Syracuse, has run for public office as a Green Party candidate 19 times. In 2011, he was unscuccessful in his bid for a spot on the Syracuse Common Council; in 2010, he ran for New York state governor.